Negative interest rates? Preposterous! Negative crude oil? Inconceivable! Silver at $61.37 RIGHT NOW, and $1,000 SOON? I know, right? Check this out…
I’m starting to think that silver’s the next market to go bonkers.
And by bonkers, I mean in a way that would surprise even the Silver Bugs.
At least, I’m preparing to be surprised anyway, and yes, I’m a proud card-carrying Silver Bug first and foremost.
Although, just a friendly little reminder, I lost my entire stack a while back, and I still can’t find it!
I have come to find out, however, that silver is one of the most out-of-whack things in the entire world.
And I do mean that quite literally.
Here’s the thing: Silver is a precious metal, and it is so rare that not even everybody on earth could have an ounce if they wanted one.
And yet, here we sit, in mid-2020, at eighteen bucks.
Eighteen stinkin’ bucks.
Just a friendly little reminder: One ounce of silver was also eighteen stinkin’ bucks in October of 1979:
The intra-month high was $18.13 that month.
Imagine that, and then imagine this: You would need to have $61.37 today to have the same purchasing power as those eighteen dollars in October of 1979!
But don’t take ‘Ol Half Dollar’s word for it, see for yourself at the US Government’s Official CPI Inflation Calculator:
And to think, that’s taking the government’s calculation at face value.
No pun intended either because it really is a sick joke the government is playing on the people in general, and savers, retirees and other people whose purchasing power is important specifically, when the US government chronically understates inflation.
Regardless, here’s my first point: I keep hearing that meme “we have long periods of time when nothing happens, and then short periods of time in which everything changes”, or however the saying goes.
My first point is that silver has born the brunt of government and central bank intervention (suppression) more than any other asset on the entire planet, for the longest time running (current multi-decade interventions), and there’s a whole lot of discrepancy to account for.
Eighteen stinkin’ bucks.
Now, why do I specifically say the silver market is about to go bonkers?
Well, all of the things that people thought were never possible are happening, and I’m talking about in the markets and in the world of finance.
For example, we’ve seen negative interest rates, and everybody for the longest time said, that’s not possible!
We’ve also seen a deeply negative crude oil price, and everybody thought that was not possible!
Which brings me to my next point: Crude oil is arguably the most important commodity in the world, but when it comes to the Periodic Table of Elements, there is arguably nothing more useful, or more important, than silver.
Yet silver has two major advantages over crude oil in that there’s a limit to how much crude oil can be stored, whereas no such limit applies to silver, and silver is money, whereas crude oil is to be consumed.
So let’s bring up the little blast from the past one more time, and look at silver’s all time record high ($50.50 on the chart above, in January 1980):
Put another way, I think silver’s going to blow-through $50 with ease.
I think silver’s going to blow-through triple digits with ease too.
We have seen problems brewing between the physical silver market and the paper silver market, after all.
Craig Hemke and I discussed the widening spreads in silver, among other things, on Wednesday, so please check out that video if you have not already:
The multi-decade active price suppression of silver can’t possibly go on much longer, and it may be that the cartel is finally at its breaking point with being able to supply physical into these markets in sufficient quantity.
OK, “Hey Half Dollar, ‘Cmon with that pie-in-the-sky garbage! Everybody knows silver’s a dead investment, nobody thinks it’s money anymore but the crazy Silver Bugs, and it’s not even that rare, so quit givin’ people false hope you big league hypocrite!”.
It’s not called false hope.
It’s called making up for lost ground.
You see, Silver’s all grown up now, and trying to contain the one underdog that’s been kicked-down, over and over and over again, well, let me put it nicely.
Tryin’ to contain silver’s price going forward be like:
How demonetisation stopped the black money market. pic.twitter.com/X46GnV7UF6— Karan Talwar (@BollywoodGandu) September 11, 2017
Only I’m not talkin’ about no dang low tide!
But rather, I’m talking about something more like this:
They’re gonna need a bigger squeegee!
So don’t be fooled by the seemingly impenetrable line in the sand:
The word “blitzkrieg” comes to mind, and if there’s a gap to fill from the break-out of the 200-day Moving Average, well, I’d say it’s already filled!.
So while they’ve been quick to monkey hammer silver as it kept poking its head above $18 this week:
I think the poundings have been out of spite for the most part, intended, also in part, to stoke despair in the minds of silver investors, and to a lesser extent, conducted as favors for profit taking by the corrupt insiders.
Remember: If the cartel has lost control, they’re not going to tell us.
We’ll just see.
So we’ll see.
In fact, to the cartel’s content, nearly the entire world is adapting to the “new normal”, for whatever that means, if not thoroughly distracted by it, so it’s pretty much now or never anyway.
I’m always early, but rarely wrong.
I would be wrong if I said the gold-to-silver ratio was back above 100:
Yes, there are analysts out there with calls for the GSR to go to 160!
No, I’m not one of them.
OK, “Hey Half Dollar, what’s your ultimate GSR target then smarty pants?”.
And possibly beyond.
But that is an article for another day.
Palladium tagged its 50-day moving average today:
I do think palladium bulls have to be patient here, but depending on how fast the other three precious metals move, palladium investors may not have to be patient for long.
I’m really liking the looks of platinum here:
For those keeping score, platinum’s up over 57% from the spike low in mid-March, and on a percentage basis, that’s more than silver’s up from its spike low (52%).
Crude oil looks really interesting here to me:
Are we going to fill that gap, and if we do, then what?
Copper keeps on climbing that wall of worry:
If we’re at the end of multiple cycles, one of which being the commodities deflation cycle, then copper’s going to keep on climbing that wall of worry too.
It is possible they keep the stock market elevated to keep the pension funds and retirement accounts from vaporizing:
If we’re not dealing with forces of good, however, they’ll bring it down specifically to wipe out a generation of “wealth” creation.
The illusion of complacency is farcical at this point:
They say the ferocious stock market rally is based on Millennial retail “investors” piling into the stock market, and if that is indeed the case, well, there’s another generation of “wealth” that will get wiped out before it even gets started.
Of course, I’m assuming the corrupt politicians, bankers, and agents of both are evil.
Your mileage, and assumptions, may vary.
I’ve got a very sneaky feeling about zero-point-six:
When the bond market blows, oh my!
Hopefully everybody bought Apple iPhones on credit instead of going to Applebee’s!
The US Dollar’s coiling is indeed impressive:
A break to the upside means your dollar buys more, but as savers of money, we’re protected either way!
What’s the bottom line as we find ourselves here this beautiful day in late May?
Everybody is so sure we’re going to crack and break to the downside.
A holiday and options expiration reinforces that bearish view.
But if this is the month we see the cartel has lost control?
Then get ready for an exciting, blazing hot summer.
Just as everybody’s trying to enjoy some rays.
Before the doom and gloom come back.
Because the economy’s collapsed?
The crack-up boom’s begun?
With a pandemic to boot?
What’s one then to do?
Then pay no mind.
To that action.
– Half Dollar
About the Author
U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.